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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
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Employment maintenance: jobseeker’s allowance: introduction

Jobseeker’s Allowance (JSA) is paid by the Department for Work and Pensions (DWP) except in Northern Ireland where it is the responsibility of the Department of Social Development.

DWP operate a modified form of PAYE. The main difference between this and what employers do is that tax is not deducted from benefit when it is paid.

Any liability to tax is calculated either

  • When the JSA claim ends

Or

  • At the end of the tax year

The total number of JSA credits in the year are displayed in Employments - P14 Summary Screen.

Note: JSA credits do not translate to taxable benefits. Customers may receive Class 1 NIC credits that count towards

  • JSA
  • Incapacity Benefit
  • ESA (Employment Support Allowance)
  • State Pension
  • Bereavement Benefits
  • Maternity allowance

Customers do not receive NIC credits if they have paid enough NIC in the tax year to qualify for these benefits.

If the customer receives taxable Jobseeker’s Allowance you will be notified by forms P14U, P45/1U, or for clerical action only cases from form PB3.

JSA claims are dealt with under the old employer reference and are classed as live records for all purposes.

The Employment Maintenance forms and procedures for dealing with periods of Jobseeker’s Allowance are similar to those for employments, except that the individual’s record is updated automatically with starting and leaving details.

There are various reasons such as system validation failures, which may prevent the automatic update process taking place. Where this happens, the record will be rejected and a work item will be produced for further clerical action.

Where no individual’s record can be found, no further action takes place.

In certain circumstances some couples make a joint claim to JSA and nominate one partner to receive the JSA payment.

There may be occasions where a record has more than one live JSA claim or a live JSA claim and another live DWP benefit, for example, Employment and Support Allowance, which is shown on EMPLOYMENT SUMMARY screen. Where this is found you should follow the guidance in action guide tax40003.

To conform to legislation, HMRC must ensure that computer systems are not being used unless there is a legitimate business need. This applies equally to viewing records as it does to updating them. An audit trail is created each time a user accesses a record and any unauthorised or inappropriate accesses will be considered for action under the Department’s Conduct and Discipline rules, and may also constitute a criminal offence.